The countries of Europe pull the checkbook to shield themselves against the scourge of the price of energy

Along with a multimillion-dollar package of public spending to relieve families and companies, the German government has announced its plan to formalize “as soon as possible” a cap on the price of electricity consumption. The chancellor, Olaf Scholz, has presented this decision along with that of a kind of extraordinary tax on the profits of some electricity companies, as if one were going to finance the other, and has suggested that Germany will try to drag European partners towards these measures. “We will try it first at the European level and, if it doesn’t work, at the national level,” confirmed Omid Nouripour, leader of The Greens, a party that, together with Social Democrats and Liberals, makes up the so-called ‘traffic light coalition’ that governs in Berlin. The President of the European Commission, Úrsula Von der Leyen, has met with the leaders of the governments of Denmark, Poland, Finland and the Baltic countries to present her proposal to reform the energy market to those who are most reluctant. Denmark, Estonia, Finland and Latvia – together with Germany, Austria, the Netherlands, Ireland and Luxembourg – have opposed intervening in the energy market and have acted according to the idea that the best response to short-term price increases is to offer national aid to vulnerable consumers and businesses. Price increases push in the opposite direction. EU countries have spent 280,000 million euros in the last year to protect consumers against energy costs, according to the Bruegel think tank, not counting the 65,000 million package that Germany has just announced. And while it is decided in Brussels whether it is possible for all of Europe to set a ceiling for electricity consumption, the different European governments are implementing measures on their own. Each country with its own plan The Austrian government has announced an “electricity price brake”, which will allow households to pay for 80% of their electricity use last year at lower prices. The measure will apply to all households, regardless of how many people live in it or the level of wealth of its inhabitants. It is expected to generate average savings for families of 500 euros per year, and 2,500 million will be used to reduce electricity bills. The Finnish government agreed last Sunday on a plan of loans and guarantees of up to 10,000 million euros for electricity production companies at risk of insolvency. The scheme aims to cover the liquidity needs derived from the higher guarantee requirements for its energy supply contracts. The measure was presented yesterday to parliament and is scheduled to be in force until the end of 2023. The Executive has emphasized that it is not about offering “free money”, but rather “last resort” guarantees and loans with “extremely strict conditions” for guarantee the liquidity of the companies. The Helsinki government’s decision comes in the wake of measures announced by Sweden on Saturday, but unlike the Swedish scheme, which is open to all Nordic and Baltic companies, the financing offered by Finland will only be available to local companies. Response of the European Commission Sweden and Finland have been in contact all weekend while designing their respective measures. The Finnish government says it is ready to continue talks with Sweden if necessary. But Finnish Prime Minister Sanna Marin has turned her gaze to Brussels and has said that she expects a responsive reaction from the European Commission. The Swedish Prime Minister, the Social Democrat Magdalena Andersson, also hopes for a European solution. “Electricity prices on the market must be decoupled from the exorbitant gas prices that Russia has created,” which she believes could cut energy prices in half, though it will take time. In the Czech Republic, more than 70,000 people have protested this weekend against the foreign policy and support for Ukraine of the conservative Petr Fiala, who is demanding short-term contracts for supply. Czech households are currently facing rapidly rising energy prices and 17% inflation, while the opposition laments insufficient support for people and businesses affected by price hikes. It is in this context that the Czech Republic has convened the emergency meeting of EU energy ministers on 9 September to reach a European agreement on how to deal with rising electricity costs, possibly by limiting of the price of the gas used in its production. Prague has tried to rally support for a community-wide solution and has even suggested the option of states intervening in the market. “The main task is to separate the price of electricity from the price of gas and thus prevent Putin from dictating electricity prices to Europe with his dealings with gas supply.”